Who pays and who free rides? International Free Rider Reporting Standards or International Financial Reporting Standards.

The idea of international financial reporting standards as a single global financial reporting language has come to stay. There is no doubt that developing accounting standards can be a difficult and expensive exercise. The substantial cost associated with the development of international accounting standards seems to be borne by only a handful of actors where as other actors (users of the standards) are free riding. Who pays and who free rides? The International Accounting Standard Setter i.e the IFRS Foundation thrives as a non-profit private organization who’s business is to commit its rather limited resources solely to the development and promotion of the use of high quality global financial reporting standards. These resources largely come from the generosity of member countries, international organizations, international accountancy firms, accounting regulators, capital market regulators, multinational firms, transnational and national accounting standard setti

Measuring the “Adoption” of International Financial Reporting Standards (IFRSs)

  Measuring the “Adoption” of International Financial Reporting Standards (IFRSs) In my last  blog entry, I referred to the chameleon nature of the description of IFRS adoption in many countries. I described the contradictions that the International Accounting Standards Board ( IASB ) presents when it refers to the overwhelming acceptance of the International Financial Reporting Standards (IFRS) globally. This contradiction and confusion generates ambiguity in the application of the standards in most less developed countries that seem to apply the standards from different angles than anticipated by the IASB. This in turn has the potential to undermine the achievement of the benefits of these standards as presented by proponents of IFRSs.  The question is, how different or similar will the outcomes (results) of IFRSs application(s) be if some countries adopt IFRSs without modifications as compared to those that apply modified versions of the standards? Will t

Global Ambiguity, local misinterpretation. Confusion in IFRS Adoption.

There is great ambiguity on the true representation of the ‘’adoption’’ of International Financial Reporting Standards (IFRS). What constitutes the ‘’adoption’’ of IFRS? At what point can a country, company or entity claim to have adopted IFRS? What is the best measure for IFRS adoption? International diffusion literature and transnational governance literature provides insights as to the point of departure of how global norms are translated into local laws. It suggests that laws, norms, ideas or global regulations when diffusing turn to be reshaped and edited as they are transformed into local practices. To be exact, actors translate ideas, recombine new, externally given elements and old locally given ones to form local laws. Scholars in this arena argue that, in this context, never can we suggest that passive adoption of global standards has taken place. Yet, in many other contexts, actors at both the local level and the transnational level have tended to ref